In Mitch Langerak's first game for the club since 2010, Nikos Vergos headed home in the 24th minute to give Victory the lead at AAMI Park.
While Sydney pressed for an equaliser, Bruno Fornaroli added a second goal in the 90th minute to deliver Victory's first win in 47 days.
Victory hadn't won since beating Perth Glory on December 8, which ultimately proved Patrick Kisnorbo's last game before his departure for Yokohama F. Marinos.
Diles' charges sit fifth, a point clear of seventh-placed Sydney.
Langerak started his first match since returning to Melbourne from lengthy stints in Europe and Japan, replacing Jack Duncan.
It was Langerak's first ALM appearance in 5424 days, since the 2009-10 grand final loss to Sydney.
Daniel Arzani and Fornaroli dropped to the bench for Nishan Velupillay and Vergos.
Socceroos coach Tony Popovic, who this week said Arzani had been "poor" in October's national team camp and needed to "raise his level" was among those watching on.
Sydney's Patryk Klimala netted in the eighth minute but the chance was ruled out for offside.
Victory took the lead when Ryan Teague's outswinging corner was well-met by Vergos, who rose almost uncontested to power the ball home.
This header is as good as it gets 😮�💨🔥 FIRST BLOOD TO — Isuzu UTE A-League (@aleaguemen) @gomvfc IN THE BIG BLUE!Nikos Vergos returns to Victory starting XI with a bang at AAMI Park 💥Watch #MVCvSYD live and exclusive NOW on Paramount+ 📺 pic.twitter.com/3fw606xWw8January 24, 2025
Soon after, Sydney were awarded a penalty when Roderick Miranda clipped Anas Ouahim, but it was changed to a free kick after a VAR review showed contact happened outside the box.
Jordi Valadon forced a strong save from Sydney goalkeeper Harrison Devenish-Meares in the 36th minute.
Klimala whipped a shot wide in the 37th and forced a strong save from Langerak two minutes later.
Langerak denied Adrian Segecic in the 52nd minute while Joe Lolley blasted a shot over the bar in the 70th.
Fornaroli sealed three points when he pounced on a Kasey Bos long ball, shrugged off a defender and rounded Devenish-Meares to finish from a tight angle.
He wheeled away celebrating, whipping off his shirt then showing it to the elated home fans.
Victory play Perth away next Saturday, when Sydney host Adelaide.
16°C